The Effect of Airline Crisis in Indian Economy

The rapidly expanding aviation sector in India handles 2.5 billion passengers across the world in a year; moves 45 million tones (MT) of cargo through 920 airlines, using 4,200 airports and deploys 27,000 aircraft. Today, 87 foreign airlines fly to and from India and five Indian carriers fly to and fro from 40 countries. Passengers carried by domestic airlines during January 2012 was recorded at 5.33 million as against 4.94 million during the corresponding period of previous year thereby registering a growth of 8.06 per cent, according to data released by the Directorate General Civil Aviation (DGCA). The air transport (including air freight) in India has attracted foreign direct investment (FDI) worth US$ 429.70 million from April 2000 to December 2011, as per data released by Department of Industrial Policy and Promotion (DIPP). Private carriers are anticipated to post a combined profit of US$ 350 million – US$ 400 million for the financial year ending March 31, 2012, according to a report titled, '2011-12 Aviation Industry Outlook' by Centre for Asia Pacific Aviation (CAPA) India. The firm expects the domestic traffic to grow as high as 20 per cent. International passenger numbers, which grew by about 10 per cent last year, are expected to increase towards the upper end of a 10-12 per cent range over the next 12 months